One of the most bullish insider transaction patterns is ‘cluster buying’. This is where three or more insiders have purchased company stock within a short period of time.
Here, we are going to highlight a cluster buying pattern at AMG Advanced Metallurgical Group NV (AMG: NA). AMG Advanced Metallurgical is a Dutch company that produces and sells specialty metals and mineral products to a global client base. It also provides related vacuum furnace systems and services. The company, which has production facilities in ten different countries, serves clients across the transportation, infrastructure, energy, and chemicals sectors. It’s traded on the Euronext Amsterdam Stock Exchange and currently has a market capitalization of €856 million.
Insider buying at AMG Advanced Metallurgical Group
Our insider transaction data shows that between July 28 and July 29, three insiders at AMG Advanced Metallurgical Group bought stock. Those who bought shares were:
● Chairman/CEO Heinz Schimmelbusch (38,500 shares @ €26.28 per share)
● Supervisory Board member Warmolt Prins (5,400 shares @ €27.14 per share)
● Supervisory Board member Herb Depp (2,950 shares @ €26.89 per share)
In total, the three insiders spent around €1.25 million (approx. $1.27 million) on AMG Advanced Metallurgical Group stock.
One thing that stands out here is that the CEO, Heinz Schimmelbusch, has invested over €1 million in AMG stock. This suggests that the insider is very confident that the market is undervaluing the company.
It’s worth noting that Dr. Schimmelbusch has been CEO of the business since it went public in 2006 and was instrumental in acquiring the original assets that made up the business when it started. So, he is likely to have a very good understanding of the business.
Record quarterly EBITDA
AMG Advanced Metallurgical Group had a strong Q2 with EBITDA improving sequentially for the eighth quarter in a row.
Revenue for the quarter jumped by 42% to $424.1 million versus a year earlier. Meanwhile, EBITDA of $81.1 million was 158% higher than the figure achieved in Q2 last year. The diluted EPS of $0.91 for the quarter was significantly higher than the figure of $0.11 achieved a year prior.
“AMG generated the highest quarterly EBITDA in our history in the second quarter of 2022. This outstanding result is mainly driven by our AMG Clean Energy Materials segment, where strong lithium prices lead to improved profitability in AMG Brazil, as well as by increased aerospace activity within our AMG Critical Materials Technologies segment,” said Dr. Schimmelbusch.
Given these impressive results, we see the recent insider buying as a positive development.